5 Stocks With Killer Long-Term Growth Potential

These stocks aren’t just a blink-and-you-will-miss-it kind of story. The five stocks listed below all have big potential on a far longer-term basis. In a 1988 letter to shareholders investing legend, Warren Buffett wrote: “Our ideal holding period is forever.” Forever may be a bit optimistic, but what about the next decade? Which stocks have the potential to post killer returns over the next ten years? These are the stocks that are still looking cheap now when you cast your investing perspective much further out into the horizon.

Here we turn to TipRanks to see which top stocks analysts are rooting for when we focus on long-term growth. Let’s take a closer look at these sector-by-sector stock picks now:

Healthcare- BioXcel (NASDAQ:BTAI)

This exciting clinical stage biopharma is certainly unique. BioXcel applies AI and big data technologies to identify the next wave of neuroscience and immuno-oncology medicines.

According to BTAI this approach uses “existing approved drugs and/or clinically validated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indices.”

The advantage is twofold: “The potential to reduce the cost and time of drug development in diseases with substantial unmet medical need,” says BioXcel. Indeed, we are talking $50 – 100 million of the cost (typically over $2 billion) of developing novel drugs.

Right now, BioXcel has several therapies in its pipeline including BXCL501 for prostate and pancreatic cancer. And it seems like the Street approves. The stock has received five buy ratings in the last four months. This is with an average price target of $23 (124% upside potential).

H.C Wainwright analyst Ram Selvaraju (Profile & Recommendations) writes “we are not currently aware of many other firms that are utilizing a systematic AI-based approach to drug development, and certainly none with the benefit of the prior track record that BioXcel Therapeutics’ parent company, BioXcel Corp., possesses.” View BTAI Price Target & Analyst Rating Details

Energy- NextEra Energy Inc (NYSE:NEE)

Energy giant BP recently released a fascinating report imagining how the energy outlook will transition out to 2040. It expects that in the future renewables will be by far the fastest-growing fuel source, increasing five-fold and providing around 14% of primary energy.

“As the world learns to do more with less, demand for energy will be met by the most diverse fuels mix we have ever seen” states the report. And that is perfect for stocks like NextEra Energy.

The company is the world’s largest operator of wind and solar energy, and also boasts natural gas infrastructure assets in Texas. According to five-star Oppenheimer analyst Colin Rusch (Profile & Recommendations), NEE is poised for “consistent accretive growth.” He writes: “We see NextEra as having best-in-class right of first offer (ROFO) projects and pipeline of potential assets.” View NEE Price Target & Analyst Rating Details

Consumer- Costco (NASDAQ:COST)

Warehouse club Costco is one of the most compelling consumer stocks out there. The company is defying challenging retail conditions with consistently strong sales and best-in-class fundamentals.

“Comps continue to exceed estimates and e-commerce growth continues to grind higher in the face of competition from major players like Amazon and Walmart. Continued in-store traffic growth coupled with a burgeoning e-commerce channel, makes Costco one of the best stories in Hardline/Broadline Retail” cheers top RBC Capital analyst Scot Ciccarelli (Profile & Recommendations).

Costco has a key advantage over other struggling brick-and-mortar stores. A huge 75% of its profits come from membership fees rather than product sales. “Costco’s membership model generates a steady, high-margin revenue stream (~70% of EBIT) that helps subsidize the rest of the company’s retailing business, which provides the company with significant pricing flexibility and supports its low-margin business.”

He is also very bullish on the stock’s long-term growth potential, writing: “We see plenty of runway for continued long-term growth ahead underpinned by 4–6% comp growth, 4% square footage growth, and 6–7% membership growth, which should yield 10–15% EPS growth long-term.”

Note how COST boasts 100% support from top analysts. We can see from TipRanks that COST has received 10 back-to-back Buy ratings in just three months. View COST Price Target & Analyst Rating Details

Tech- Baidu (NASDAQ:BIDU)

As China’s No. 1 search engine, Baidu is often nicknamed the ‘Google of China.’ Like Google, Baidu’s business interests span much more than just search. Baidu’s business covers the cloud, AI, maps, IT security and self-driving technology. The latest update: Baidu has announced a new partnership with Ford Motor to develop smarter cars for the Chinese market.

Ford will now install Baidu-powered in-vehicle infotainment systems known as DuerOS in its cars for Chinese customers. Ya-Qin Zhang, president of Baidu says: “Together, with Baidu’s leading-edge AI technology and Ford’s advanced engineering expertise, we will transform the mobility ecosystem and create the next-generation in-vehicle experience for consumers.”

And from a Street perspective, Baidu certainly gets the thumbs up. The ‘Strong Buy’ stock has received 4 recent Buy ratings from top analysts specifically vs just 1 hold rating. This comes with a $300 price target (15% upside potential).

Top Oppenheimer analyst Jason Helfstein (Profile & Recommendations) has just reiterated his BIDU Buy rating. The “current valuation is too low for the leading Chinese search engine” argues Helfstein. He points out that BIDU is in prime place to benefit from the secular growth of China’s online ad market. “The penetration of smartphones in China, especially in lower tier cities, provides another strong revenue stream for BIDU.” View BIDU Price Target & Analyst Rating Details

Services- Netflix (NASDAQ:NFLX)

Netflix shares are currently down following disappointing second quarter earnings results. But this could represent a savvy buying opportunity for a stock that still has robust growth ahead. “The long-term potential is too great for us to suggest anything other than buying Netflix on today’s weakness” stated Piper Jaffray’s Michael Olson (Profile & Recommendations). He has a $420 price target on the stock (16% upside potential).

Meanwhile, Stifel Nicolaus analyst Scott Devitt (Profile & Recommendations) actually upgraded his NFLX rating from Hold to Buy post-results. “We view Netflix’s long-term outlook positively, given the upside case we believe exists for the company’s domestic and international opportunities,” he stated.

Devitt is projecting Netflix will continue to add 5 million domestic subscribers per year through at least 2020. “We believe current Street forecasts underestimate Netflix’s U.S. subscriber growth trajectory, as historical peak video entertainment device and cable penetration levels point to potential household penetration rates of over 90% versus Netflix’s current 46%,” he says. This five-star analyst has a $406 price target on the stock.

Most encouragingly, “We believe higher U.S. penetration potential bodes well for Netflix’s long-term international growth opportunity, as we estimate total international subscribers as a percentage of addressable international broadband households will be just under 20% exiting 2018,” he says. View NFLX Price Target & Analyst Rating Details

 

TipRanks’ Top Recommended Stocks tool factors in ratings made by the best-performing analysts. These are the ...

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